Earlier, sources familiar with Qatari investment policy told Reuters the Qatari investors – who currently own just under 10 percent of Deutsche Bank – do not plan to sell their shares and could consider buying more if the embattled German bank decides to raise capital.

But two sources familiar with the situation said it was unlikely that they would acquire a stake as big as 25 percent.

The German bank’s U.S.-listed shares jumped 3.1 percent on the Spiegel report but retreated from session highs following the Reuters sources report and traded 1.1 percent higher by 1648 GMT (1248 EDT).

Deutsche Bank declined comment. Sheikh Hamad was not immediately available for comment.

Funds controlled by HBJ bought 6.1 percent of Deutsche in mid-2014 and increased their stake to just under 10 percent, including options, in July this year.

Strategic errors, massive fines and attacks by speculators have created a major crisis for Germany’s most important bank. Now, investors from Qatar, who already own some 10 percent of Deutsche Bank, are considering taking control.

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It was Anshu Jain himself who arranged the deal in May 2014 with Sheikh Hamad bin Jassim bin Jabor al-Thani of Qatar. The two knew each other, of course – the former co-CEO of Deutsche Bank and the ex-Qatari prime minister, also known by his initials HBJ, who is one of the richest and most influential men in the Gulf region. HBJ had long been a valued Deutsche Bank customer before discreetly negotiating a deal with Jain that saw him invest 1.75 billion euros in the bank, making him one of the Frankfurt-based financial institution’s major shareholders.

Jain celebrated the coup, because it appeared that Deutsche Bank had gained a strong partner who could help pave the way to better times for the bank. A partner who explicitly supported Jain’s strategy of establishing the company as the last globally important European investment bank. The German government also favored the development.

But just two and a half years later, the bank is at the edge of the abyss. Jain was deposed from his position as a result of his role in the financial crisis and because of his limited success as co-CEO. His successor John Cryan, who has now been at the helm for 15 months, has also failed to come up with a coherent strategy, the bank’s capital is tight once again and distrust among shareholders and customers alike is growing.

On September 15, the Justice Department in the United States ordered the company to pay a $14 billion fine to settle accusations of fraud in Deutsche Bank’s packaging and sale of mortgage-backed securities in the free-wheeling days that led to the global financial crisis. Speculators and politicians have been in a state of near panic since the announcement, with open speculation about the possibility of a government bailout for the prestigious bank. An atmosphere of frustration and depression is currently prevailing inside the bank and Cryan is trying to combat it with messages of perseverance.

For a time, Deutsche Bank’s market value plummeted below 15 billion euros, down from 35 billion a year ago. Large-scale investor HBJ and his cousin – the former Emir of Qatar, Sheik Hamad bin Khalifa al-Thani, who he has since brought in as an investor as well — are believed to have lost more than a billion euros – on paper, at least. This summer, the two increased their holdings to just under 10 percent of the company, but Deutsche Bank’s market capital has since continued to slide.

Attractive Investment

And yet, it appears that the low share price is encouraging the sheikhs to invest even more now that it wouldn’t take more than a few billion for them to gain control of Deutsche Bank. Information obtained by SPIEGEL indicates that the al-Thani cousins are considering propping up the bank with a fresh capital infusion and purchasing a blocking stake of 25 percent together with other investors.

To do this, they could partner with sovereign wealth funds, some of which are apparently willing to invest in the company.

But the information obtained by SPIEGEL also suggests that HBJ and the former emir would only be willing to take that risk if they could have a strong say in business decisions at Deutsche Bank. They are said to be deeply frustrated over the fact that the bank has been unable to maneuver itself out of its defensive position. The Qataris are said to be increasingly unhappy with Cryan’s current management team and believe the company’s present course is dangerous. The problems can’t be fixed through cost saving measures alone, they believe, particularly with eroding revenues and profits could. This displeasure manifested itself through the appointment in July of attorney Stefan Simon to the supervisory board. He represents the Qataris’ interests inside the company.

If the Qataris continue increasing their holdings at Deutsche Bank, it’s likely they will also push for changes in executive management. Paul Achleitner’s role as chairman of the supervisory board may likewise be in danger, despite the demonstrative support showed him by HBJ this spring.

In terms of bank strategy, the sheikhs would like to see Deutsche play a greater role in global investment banking. Only in that segment, they believe, does the company still have the potential to earn big money, even today. The hope of the Gulf investors is that fresh capital could strengthen the bank and enable it to regain lost market share. It would be the very back-to-the-future strategy that Anshu Jain promised when he brought the Qataris on board as investors. They appear to regret Jain’s departure – it is reported that one of their advisors is one of the deposed Deutsche Bank co-heads former senior executives, Michele Faissola, who ran Deutsche Bank’s asset and wealth management division.

Whether HBJ and the former emir will in fact seek to take control of Deutsche Bank remains to be seen. The bank isn’t making any statements about the issue and the Qataris could not be reached for comment by the time this story went to press.

‘A German Institution in Name Only’

But the path would seem to be clear. Banking supervisors at the European Central Bank reportedly have no fundamental concerns about the scenario. And it is also unlikely that the German government would intervene to stop such a deal from happening. German Finance Minister Wolfgang Schäuble has no objections to the Qataris making a larger investment in Deutsche Bank. “We have no problem with an investor like that,” a ministry source said. There is nothing to indicate the Gulf investors have any kind of hidden agenda, the ministry said, adding that, like any other strategic investor, they are simply trying to put their money where they can get a safe return on their investment.

In other words: The Finance Ministry’s position is: What’s good for the Qataris is also good for Germany.

Schäuble would likewise have no issue with the Qataris obtaining a blocking minority of 25 percent or more. In such instances, the government can intervene under the country’s foreign trade law, but Berlin doesn’t want to. One of Schäuble’s staff explained the reluctance to stop the investments by saying: “At this point, Deutsche Bank is a German institution in name only.” More than half of the company’s shares are held by foreigners, the staffer explained, and the company’s business model is a global one. “In that sense, any strategic investor can help create stability.”

Experts within the Finance Ministry expect that the beleaguered bank will also be interesting to other investors, like sovereign wealth funds in need of places to invest their surplus billions. But officials in Berlin believe they will hold back until Deutsche Bank’s legal dispute with the United States has finally been settled. The Qataris also appear to be delaying their first steps.

Berlin Doesn’t Want to Intervene

One of the reasons the German government is willing to embrace investors with open arms is due to speculation in recent weeks of a national bailout of Deutsche Bank. Of course the government would step in if Deutsche Bank threatened to become a problem for the entire financial system. But prior to federal parliamentary elections next year, nobody wants to be in the position of having to explain why taxpayer funds must be used to rescue Deutsche Bank.

That’s why outbursts like the one made last week by Economics Minister Sigmar Gabriel, who is also head of the center-left Social Democrats, are so popular. During a trip to Iran, be blustered, “I don’t know if I should laugh or be angry that a bank that made speculation its business model has now declared itself to be the victim of speculators.” His tirade was based on statements made by Cryan that hedge funds are attacking the bank, causing the recent stock price fall.

Gabriel isn’t wrong: Deutsche Bank is indeed suffering the long-term effects of its risky business policies and it still counts around 800 hedge funds among its customers.

But even if Gabriel, as the head of a center-left party, may enjoy bashing the bank, as economics minister it is in his interest to help to stabilize the last German financial institution of global importance.

In the American media, reporters have already begun drawing parallels between Deutsche Bank and the final, pre-crash months of Lehman Brothers. For much of 2008, it was a toy for speculators and distrust grew among investors to the point that the bank had to be dismantled.

An Exaggerated Comparison

The comparison, though, is far-fetched. The bank still has cash reserves of 215 billion euros and could very quickly make that money available. It also has much bigger capitol buffers than it did in 2008.

But the mechanisms of the world of finance haven’t changed since then. If investors, customers and employees lose their trust in a bank, the floor could fall out from beneath it. Speculators then begin attacking the weakest link – and even just fears of a collapse, however unrealistic that angst may be, can become a self-fulfilling prophecy.

That explains why Deutsche Bank’s stock price went haywire last week when reports emerged that around a dozen hedge funds had withdrawn from the bank. In normal times, such withdrawals would hardly be noticed, the company’s stock price collapsed out of fear that those 12 hedge funds could be a harbinger of worse to come: flight by major customers.

This is making supervisory authorities, but particularly shareholders and bond holders in the bank nervous. Many view the fines being imposed for sins committed by the company in the US real estate market as the sparks that could cause Deutsche Bank to go up in flames. So far, the German government has shown reserve on the issue. The word in Berlin is that an intervention isn’t justified. Finance Ministry sources recall France having had a similar experience years ago. “It totally backfired and we don’t want a repeat of that.”

Market players expressed a sense of relief in recent days as it emerged that Deutsche Bank may be able to settle its dispute with the Justice Ministry for $5.4 billion. But the partial recovery of Deutsche Bank’s stock price can also in part be explained through the fact that hedge funds that had previously speculated on a further drop in the stock may have bought back stocks in order to cash in their profits or minimize losses.

The ultimate size of the fine Deutsche Bank will have to pay the Americans remains open. Bank CEO Cryan is currently in Washington seeking a settlement for the company. A deal with the US authorities would be positive news because it would eliminate the uncertainty over how high the fine will be.

Still, a $5.4 billion fine is significant and would consume almost the entire reserves the bank has earmarked for legal disputes. The bank had assigned only half that total to the subprime mortgage dispute with the US. The rest had been intended to cover the threat of billions in fines relating to dubious business practices in Russia.

Experts calculate that the bank could handle a fine even as high as $7 or $8 billion without falling below legally mandated capital thresholds. Shareholders and analysts nevertheless believe the company needs additional capital – not just to cover the fines, but also because the bank needs a thick buffer to secure the peace and quiet it needs to undertake difficult restructuring.

Desires for a Strong Shareholder

Influential investors are also demanding a clearer strategy. They want to know “what segments the bank wants to make money with in the future,” says one major shareholder, who adds that the company hasn’t provided any satisfactory answers to that question in past years.

Desires for a strong major shareholder to inject money, eliminate persistent doubts about the bank’s capitalization and push for a clear strategy are growing – and this despite the fact that every existing shareholder knows that an increase in capital would drastically water down the value of their own holdings in the company.

That’s the situation that is playing into the hands of Hamad bin Jassim bin Jabor al-Thani. He’s one of the business world’s richest and most flamboyant personalities, with a fortune estimated at between $10 and $70 billion. His business partner, former emir Hamad bin Khalifa al-Thani, once said he may rule Qatar, but HBJ owns it.

And it’s not just Qatar that he owns, either – his holdings around the world include a luxury apartment at One Hyde Park in London, one of the world’s most expensive residential properties, along with the Picasso painting “Women of Algiers” which he purchased for a record price of $179 million last year.

There are many rumors about how HBJ amassed his fortune, some of which don’t cast a particularly flattering light on the sheikh, who initially pursued a career in politics, serving as prime minister from 2007 to 2013.

Years ago, authorities in the British territory of Jersey accused HBJ of having taken bribe payments from the British defense firm BAE. Investigators closed the case following a voluntary, multimillion dollar payment to Jersey authorities. Any further proceedings against HBJ were deemed to not be in the public interest.

He once described his attitude about his accrual of wealth in a television interview. He said that some of the wealth he had, like that of all Qataris, may be questionable from a Western point of view. But according to Qatari standards, it was legitimate and had been obtained through legitimate business.

A Penchant for Tax Havens

Like many of the wealthy and superrich, HBJ has a soft spot for tax havens. His 133-meter yacht is technically held by a shell company, and even the shares he has acquired in Deutsche Bank so far are owned by a chain of offshore companies set up in Panama and the British Virgin Islands. With increasing public focus on such tax oases, the number of questions being asked about the origins and use of HBJ’s money are likely to grow.

Qatar has also repeatedly been accused of supporting Hamas and not doing enough to combat Islamist terrorism. As such, its relationship with the United States is not particularly tight.

Indisputable, though, is HBJ’s penchant for investing in the financial industry. Even back when he was in charge of the emirate’s sovereign wealth fund, he had a focus on banks, with Qatar investing in Barclays when it had solvency problems during the financial crisis. Qatar also invested in Credit Suisse as well as in the London Stock Exchange.

As a private investor, HBJ has continued to focus on the financial industry, investing in Barclays, this time as a private citizen, and acquired the Luxembourg business of the dissolved financial group Dexia and bought the little-known KBL group, which owns Munich’s private Merck Finck bank.

But the 2014 purchase of Deustche Bank shares has been the sheikh’s most important strategic investment.

The key question as to the future of Deutsche Bank is what the sheikh wants to do with it.

According to the Financial Times, Qatar’s al-Thani family increased their stake in the German lender via two investment groups: Paramount Services Holdings and Supreme Universal Holdings.

The royals first bought into Deutsche Bank in 2014 when then-chief executive Anshu Jain persuaded them to invest as part of an €8bn (£6.8bn, $9bn) capital raising.

Shares in Deutsche Bank have more than halved over the past year and hit an all-time low of €11.38 on 7 July. The exact timing and price of the share purchase was not disclosed.

As of August 2015, the family held a 6.1% stake in the bank via the two investment groups. Both investment groups now hold just under 5%, ahead of BlackRock which holds roughly a 6% stake.

Board recommendation

The Qataris have also recommended the appointment of Stefan Simon to replace Georg Thoma who stepped down from the bank’s supervisory board in May.

“We are pleased that our Qatari shareholders are banking on the success of Deutsche Bank as shown through their long-term holdings.”

Simon is a partner at the law firm Flick Gocke Schaumburg in Bonn and an honorary professor at the University of Cologne.

“We are pleased that our Qatari shareholders are banking on the success of Deutsche Bank as shown through their long-term holdings,” said Paul Achleitner, chairman of the supervisory board.

“We welcome Stefan Simon, a highly qualified attorney, to the supervisory board. He has a great deal of experience in corporate law, corporate governance and compensation oversight.”

Simon will stand for election as a member of the Supervisory Board at the Annual General Meeting on 18 May 2017. Until then, he is to be appointed as a member of the supervisory board by court order. The application for this appointment was submitted to the local court in Frankfurt am Main on Friday.

Paramount support

Paramount Services Holdings issued a rare public statement in March supporting Achleitner as chairman of Deutsche Bank, despite a more than 50% fall in the value of the lender’s shares.

Achleitner was facing pressure from investors over the bank’s weak performance, amid speculation that he would not win a second term when his contract expires in 2017.

Investors are hurting from Deutsche Bank’s share price collapse, none more so than Qatar.

The wealthy Gulf state bought into the struggling German lender back in 2014, when it injected 1.75 billion euros ($2 billion) in return for about 60 million shares.

Those shares are now worth just 624 million euros, or about 1.13 billion euros ($1.3 billion) less than Qatar paid.

The stock has fallen more than 50% in 2016, and 17% this month alone. Fears about the bank’s ability to make money, and whether it can afford a looming U.S. fine for selling toxic mortgages a decade ago, have sent investors running for the exit.

Not Qatar, however. Former prime minister Sheikh Hamad bin Jassim Al Thani, who owns the Deutsche Bank (DB) shares via two Caribbean-registered investments firms, increased his stake in 2015, and again a few months back.

That made him the biggest single shareholder ahead of Blackrock (BLK).

The bank revealed in July that the Qatari’s firms — Paramount Services Holdings and Supreme Universal Holdings — each owned just under 5%.

“We are pleased that our Qatari shareholders are banking on the success of Deutsche Bank as shown through their long term holdings,” said Paul Achleitner, Deutsche Bank chairman, in a statement in July.

In return, Al Thani got to nominate a director to Deutsche’s supervisory board.

But Qatar’s loyalty is costing it dearly. It’s not clear how much the Qatari royal paid for the additional shares he bought in 2015 and earlier this year, but the stock has been sliding constantly, and accumulated losses on the holding could be closer to $2 billion.

Oil and gas rich countries in the Middle East have been investing their wealth in global companies and banks as part of a strategy to generate alternative streams of income.

Qatar came to the rescue of Barclays (BCS) during the global financial crisis, injecting billions of pounds and helping the British bank dodge a government bailout. It’s still the biggest shareholder with about 6%.

All three banks are hacking away at costs and overhauling their businesses. But it may be a very long time before Qatar sees any return on its investment. Barclays stock is down 25% this year, and Credit Suisse has lost 40%.

The Swiss bank’s CEO Tidjane Thiam was reported to have told a Bloomberg conference earlier this week that European banks are “in a very fragile situation” and “not really investable as a sector.”

Deutsche executives must be hoping Qatar doesn’t share that view. They may need to ask it again for help.